Victory over bank sales of PPI

Over recent years there has been a lot of controversy over single premium payment protection insurance cover. Whilst much of the concern has been related to the way that this type of insurance cover has been mis-sold by many lenders and providers, there has also been a lot of concern relating to the cost of single premium PPI. Read more

Tags: ppi, Types of insurance, payment protection insurance, alliance, Lloyds Banking Group, PPI victory, useful type, PPI product

Only five% of first-time buyers used 100% plus mortgages

Despite being “very good” for first-time buyers, only five percent of them used the 100 per cent plus mortgages to get themselves onto the property ladder, one financial expert has claimed.

According to Firstrung these 100 per cent plus products were “niche products” which never became as popular as people made out.

Paul Holmes, chief executive officer of Firstrung, said that the media tried “to portray that people went out and had a hundred per cent mortgage on their property … they didn’t. They had a 95 per cent mortgage, and could take a loan up to 30 per cent or £30,000 – whichever was greatest”.

Firstrung said that the majority of first-time buyers who took 100 per cent-plus mortgage product took a 95 per cent mortgage and a ten per cent personal loan.

Mortgage lenders Northern Rock, Alliance & Leicester, Birmingham Midshires and Abbey have all withdrawn from the 100 per cent mortgage market.

These lenders have begun to require borrowers to supply the deposit on a new home themselves.

Tags: loan, Birmingham, cent plus mortgages, alliance, Paul Holmes, abbey, ladder, plus

Over a £1bn spent on Valentine’s day

Over a £1 billion is expected to be spent on Valentine’s day, despite over half of consumers saying the day has become ‘over-commercialised’, according to new research.

Findings from research by Alliance & Leicester covering customer activity on the Valentine weekend last year indicate that debit card spending on flowers, restaurants and jewellery rose by 60 per cent compared with the previous week.

Last year men spent more than 36 per cent the normal amount in florists on Valentine’s day

Emma Walkley, senior current account manager at Alliance & Leicester, said: “Although people say Valentine’s day has been spoilt by over-commercialisation, spending patterns show that we still make an effort to celebrate it in some way.”

She added that consumer figures from last year reveal a ’spending rush’ on the day and those preceding February 14th in 2007, a trend expected to be repeated again this year.

Meanwhile, research from Halifax has shown that the average male spender is expected to pay £42 on flowers and £82 on eating out during February.

Tags: Flower, week, Valentine weekend, trend, Jewellery, alliance, customer activity, research

New account launched by Alliance and Leicester

A new current account has recently been launched by the Alliance and Leicester. The Account, which is known as the Premier 50 account, is aimed at customers aged 50 and over, and offers a wide range of benefits that could suit consumers in this age group.

Older travellers can find it notoriously difficult to get travel insurance, and one of the benefits that this bank account offers is annual worldwide travel insurance that provides cover up to the age of 79.

Other benefits that come with the Premier 50 account include a credit interest rate of 7% AER, a range of medical benefits, and a range of lifestyle and leisure benefits. However, despite all of these benefits it is uncertain how successful the account will be. This is because research shows that consumers aged 50 and over tend to be reluctant to change their current accounts, and survey results show that nearly 50% have never switched banks.

Customers of the Premier 50 account will be able deposit cash and cheques, and make withdrawals at over twelve thousand post office branches throughout the country. A monthly fee of £10 is charges on the account, which covers the cost of all of these benefits. Medical consultations, diagnostic tests, and a 24 hour helpline are included in the benefits that are offered with the Premier 50 account.

Another bank, NatWest, recently launched an age specific account, with its NatWest Adapt account, which is aimed at those aged between eleven and eighteen. Bank officials stated that the account was aimed at helping people in this age group to learn how to manage money responsibly and sensibly.

Tags: alliance, personal, leicester, interest, accounts, bank

No interest will be charged on A&L overdrafts

Another bank has revealed its new charge structure with regards to overdrafts and bounced cheques. According to recent reports the Alliance and Leicester will now no longer be charging any interest at all on its overdrafts on current accounts.

The bank will also be reducing the charges applied for a bounced cheque, which will go down from £34 to £25. Officials from the Alliance and Leicester state that in place of interest charges on overdrafts new daily charges will come into force.

Banking will still be free for customers that keep their accounts in credit, state bank officials. The new charge structure is due to come into force around the third week of October. Some banks, such as Lloyds TSB, have already announced their plans to reduce overdraft charges and fees for bounced cheques, which many think is a direct response to the investigation into bank charges that has been carried out by the Office of Fair Trading.

However, officials from Alliance and Leicester claim that this is not the case, and that they had plans to change the fee structure prior to the investigation.

One official from the Alliance and Leicester stated: “The combination of fees and interest is unnecessarily complex when you are trying to present your business as simple.”

Under the new charge structure customers using an authorized overdraft will be charged 50p per day up to a maximum of £5 per month. If the overdraft is unauthorized then the customer will have to pay £5 per day until the account is brought back into order.

One industry professional stated: “Customers should ask themselves whether the new simplified fee structure does actually save them money in the long-term.  According to our analysis, the new way of charging will result in Alliance & Leicester customers being marginally better off.”

Tom Smith
24th October 2007

Tags: account, customer, unauthorized, charge, leicester, pay, overdraft

Homeowner demographics are changing

The UK’s demographics are changing and as a result our living habits are developing too.

According to new research by Alliance and Leicester in conjunction with the think tank Centre of Future Studies, our changing social landscape means that people are staying at certain life stages longer than before.

A decreasing rate of mortality and fertility have changed the way we pigeonhole people and the study says that most of us live in more houses in our life times than we would have in previous years.

The report suggests that the adkid demographic will be prevalent in the coming years, with around 80 per cent of people falling into the category by 2026.

This points to people who prolong the length of time they spend living with their parents, therefore gaining the title of adult children (adkid).

Adkids are said to be more susceptible to having a Peter Pan attitude – the desire to not grow up – and according to the report means that leaving home, getting married and having children are put off until later in life.

Overall, the study predicts that household numbers will increase in the future with a number of factors having an impact.

It anticipates that more people will live alone due to increased divorce rates, while marital homes will become less common.

“Changing demographics and social attitudes will inevitably have an effect on the housing market in the future, for example, the number of times that people move in their lifetime, or the increase or decrease in the type of household they live in,” commented director of mortgages at Alliance and Leicester Stephen Leonard.

“These trends are predicted to change dramatically in the next 20 years.”

Tags: number, uk, report, alliance, leaving home, attitude

Personal loans an option for home improvers

Personal loans are an option that people considering carrying out expensive work on their homes should consider, Alliance & Leicester has said.

According to the company, improvements such as loft conversions can add up to £100,000 to the value of a home.

However, developments like these do not come cheap, with the average cots of a dormer loft conversion currently around £23,000.

Many homeowners may instantly think to add such an expense to their mortgage, but Alliance & Leicester claims that a personal loan could be up to £15,000 cheaper in terms of interest payments.

“Carrying out home improvements instead of moving can have amazing results, potentially increasing the value of your existing property and also saving a great deal of money as well,” said Richard Al-Dabbagh, senior personal loans manager for Alliance & Leicester.

“If you are looking to undertake a sizeable home improvement, there will be a massive temptation to simply take out a further advance on your mortgage. But a personal loan could represent a cheaper alternative for those who can afford higher monthly repayments over the shorter term.”

Tags: dormer loft conversion, Richard Al-Dabbagh, loft conversions, work, alliance, interest payments, home improvement